Year in review
Military forces must maintain their mission readiness through training. That’s one of the reasons why, despite defence budgets not increasing in recent years, we managed to deliver a solid performance. With defence budgets stabilizing and starting to rise, our ability to provide training at a lower cost than live training helped increase our Defence & Security business in fiscal 2016.
|(1) Segment operating income (SOI) is a non-GAAP measure and our key indicator of each segment’s financial performance. This measure gives us a good indication of the profitability of each segment because it does not include the impact of any items not specifically related to the segment’s performance. We calculate it by taking the operating profit and excluding the impact of restructuring costs.
(2) The book-to-sales ratio is a non-GAAP measure calculated as total orders divided by total revenue in a given period.
(3) Backlog is a non-GAAP measure that represents the expected value of orders we have received but have not yet executed.
NATO Flying Training in Canada
In fiscal 2016, we made good progress on our training systems integration (TSI) strategy for delivering end-to-end live-virtual-constructive (LVC) training solutions to defence forces. The NATO Flying Training in Canada (NFTC) program, one of the world’s premier military pilot training programs, exemplifies this strategy. In October 2015, we became the NFTC’s prime contractor and now provide classroom, simulator and live flying training support for the Royal Canadian Air Force (RCAF) and allied military pilots.
The NFTC program expands our capability to support live flying training and to help produce next-generation fighter pilots. It also increases our opportunities for growth as a training systems integrator for air forces globally. In March 2016, the NFTC program achieved a major milestone: more than 350,000 hours of live flying training since its inception in 2000.
In the U.S.
In June 2015, we won a contract to provide the U.S. Army with comprehensive training for fixed-wing pilots. At the new training centre we are building in Dothan, Alabama, we will provide academic and simulator training as well as live flying training on U.S. Army and CAE-owned aircraft.
Our Defence & Security and Healthcare teams joined forces to win another U.S. Air Force (USAF) contract for an end-to-end C-17/KC-135 aeromedical evacuation training system. This followed a previous contract to deliver a C-130 aeromedical trainer. Our Defence & Security professionals design and deliver the high-fidelity fuselage trainer, with our Healthcare experts providing human patient simulators, training support services and instruction.
The increasing demand for intelligence, surveillance, reconnaissance and strike capabilities provided by remotely piloted aircraft (RPA) means more pilots and sensor operators need to be trained. Our USAF contract to deliver comprehensive MQ-1 Predator and MQ-9 Reaper aircrew training continues, enabling the USAF to create more RPA aircrews.
In September 2015, we supported the Royal Australian Air Force (RAAF) in one of the world's largest virtual, multi-national air combat training exercises. Coalition forces trained together in this distributed, integrated LVC exercise. In late fiscal 2016, we further strengthened our long-term relationship with the RAAF as its C-130J training partner of choice with a contract to provide a fuselage trainer for the Hercules aircraft.
In fiscal 2016, we expanded a previous contract with the Italian Air Force (ITAF) and are now working with General Atomics Aeronautical Systems, Inc. (GA-ASI) to develop a high-fidelity Predator Mission Trainer. The trainer will represent the ITAF’s Predator® A and Predator B/MQ-9 remotely piloted aircraft. We are currently gathering flight test data on these aircraft to ensure the highest fidelity simulation of flight systems and sensor payloads.
We also renewed our collaboration agreement with Eurofighter Simulation Systems for visual systems on the Eurofighter Typhoon Aircrew Synthetic Training Aids (ASTA) program.